Preparations for EU Exit

Statement to Parliament from Cabinet Secretary for Government Business and Constitutional Relations Michael Russell on Tuesday 18 December.

Let us never forget that, on the 23rd of June 2016 Scotland voted overwhelmingly to remain in the European Union.

Every unpalatable consequence that arises from Brexit does so, therefore, as a result of the UK Government defying, and denying, that democratic decision.

And leaving the EU, just 100 days from tomorrow, with no deal in place would be the worst such consequence imaginable.

Presiding Officer, a “no deal“ exit from the EU would have very severe impacts on Scotland and would result in irreparable damage to our economy, our people and our society.

We know that and are compelled to say so. Our neighbours, like Ireland, know that and have been saying so for a long time. Now the entire EU27 knows that and will be saying so tomorrow. And even the UKG knows it to be true as it acknowledged at its Cabinet meeting this morning.

Scotland deserves better, and needs better, than the Prime Minister's blindfold EU Exit or a “no deal” both of which would cause untold chaos.

Last week I made it clear in this chamber that the Scottish Government believes it is time to put the choice about our future back to the people in a second referendum.

That is more urgent than ever now. It is essential that the UK Parliament takes control of the process, demonstrates that there is a majority for a people’s vote and starts work on the legislation which will deliver another referendum.

However, the Scottish Government, as a responsible Government, must also prepare the nation and the people, in so far as it can, for any eventuality including that of a “no deal”.

But let me say at the outset that whilst this Government will do

everything we can to prepare and help we must not let anyone believe we can do everything.

That would be impossible for any Government, anywhere.

We will however work with all those who have a similar task, including the UK Government and tomorrow I will be meeting UK Ministers to further discuss these matters.

Over the past few months I have met with each of my Cabinet colleagues to discuss their expectations and concerns about a “no deal” scenario. That process was underpinned by detailed work across government to identify the risks and potential impacts of EU exit, and the mitigating actions that we and others could take, across a wide range of issues.

Through these processes we have considered, in detail, the legislative, organisational and financial issues arising out of a possible “no deal”.

Furthermore, weekly meetings of SGORR - the Scottish Government Resilience Committee – have been held with the Deputy First Minister convening. These meetings have input from other Cabinet Secretaries including those responsible for Health, Justice, Transport, Rural and Finance as well as their officials, other organisations such as Transport Scotland, Food Standards Scotland and Marine Scotland, COSLA , civil contingencies responders and, of course, Police Scotland.

This structure is supported by a “rapid response” group of officials which will grow as need requires.

The issue of staffing is a key one. Across the Scottish Government, Directorates are refocusing on detailed preparations for a "no deal”, realigning staff towards this work where required. We are mobilising the Scottish Government and its associated agencies and public bodies, and aligning our existing financial and staff resources, towards those areas with specific no deal impacts, and ensuring we have the right people in the right places with the right skills to respond quickly and effectively.

Given the wide range of problems a “no deal’ exit would undoubtedly bring, Members will understand that our plans and preparations are wide ranging too. Within that, there are a number of key areas of focus.

It is well recognised for example that the new customs arrangements and regulatory checks which a "no deal” exit would involve would severely disrupt the flow of goods at UK borders, particularly Dover, which handles many of our key goods, such as food and medicines.

A "no deal” exit would also jeopardize Scotland’s food security, as well as seriously harming the ability of Scottish food and drink producers to export their goods to the EU, such as our beef and lamb which would face significant tariffs.

Half of all the food the UK consumes is imported. And, of the food imported, around 70% comes from the EU. It is expected that the availability and the price of food and drink are likely to be significantly affected – with a disproportionate impact on the most vulnerable in our society.

Consequently, the Scottish Government, including Transport Scotland, is working with distributors, with purchasers, with suppliers, with transport providers, and with the ports and with CMAL, to fully assess the impact and identify what can be done to help mitigate disruption.

It is our aim to try and secure the best flow of essential goods into Scotland by either using existing routes or developing new ones.

In health and social care, a “no deal” will put at risk the supply of medicines and medical devices; it will have a negative impact on our health and social care workforce, ongoing clinical trials, access to future EU funding, and the rights of Scottish citizens to access state-provided healthcare across the EU.

Our attempts to ensure continuing supplies of medicines are being severely hampered by the refusal of the UK Government to provide us with critical information about which medicines may be subject to supply problems. It is imperative they provide this information now. Just two hours ago the UKG, after sustained pressure from this Government, have indicated that they would share medicines data, but we are sill awaiting this information.

In addition, work on stockpiling of medical devices and clinical consumables in Scotland is ongoing, and will have financial implications for us, which could necessitate bringing forward funding from next year.

If there was a "no deal” exit, we would lose access to many of the security and law enforcement co-operation measures that Police Scotland and the Crown Office use on a daily basis to keep people safe. We would lose membership of Europol and use of the European Arrest Warrant. We would also lose access to vital information-sharing arrangements.

This would represent a significant downgrading of our policing and security capability at a time when cross border crime and security threats are increasing.

Police Scotland are considering what actions could be taken to substitute for these arrangements and organising to be prepared for any civil contingencies emergencies.

Finally, on fishing, members will know that, unlike the UK as a whole, Scotland is a net exporter of seafood with EU member states accounting for 77% of Scottish overseas seafood exports in 2017.

Any delays experienced at the vital Dover/Calais, Eurotunnel corridor will have a catastrophic impact on our seafood industry, and, in turn, on our remote rural and coastal communities that rely either wholly or partly on seafood sectors.

The economic effects of a “no deal” exit – most especially new tariff and non-tariff barriers – and the disruption to trade with the EU would, therefore, be felt both severely and immediately.

We are investigating actively what routes might be available to ensure that such goods get to market, though the lack of inspection staff and the reversion of the UK to “third country” status may well be insuperable in the short term.

There are, of course, many other issues on the list of risks and issues, which is being regularly updated and work is being done on all of them.

But in the time available to me let me emphasise four overarching issues that need to be noted.

Firstly, one of the biggest difficulties facing us is the problem of getting information from the UK Government. There are signs that this is improving slowly, in some areas, but it is essential that the UK Government sees the provision of such information and the sharing of plans - along with joint working - as a process which requires the close involvement of - and respect for the institutions of - the devolved administrations. This is a matter I will stress again in London tomorrow.

Secondly, we continue to press the UK Government to assess fully the financial implications of leaving the EU and have been clear that Scotland’s public finances must not suffer detriment.

In the event of a “no deal” there would require to be an urgent transfer of funds from the UK Government to allow the Scottish Government to meet the obligations it would have to enter into.

Some money is already being spent, and the financial implications of EU exit and associated preparation activity have been raised on a number of occasions by the Cabinet Secretary for Finance with the Chancellor and the Chief Secretary to the Treasury.

Thirdly, the nebulous approach of the UK Government to decision making on Brexit has meant that it is impossible to know when these plans might need to go into effect.

The Scottish Cabinet agreed this morning, building on existing planning and activity, to further accelerate work to mitigate the potential impacts of the UK leaving the EU without a deal.

We are undertaking necessary preparations to enable us to operate our arrangements at very short notice. I assure this Chamber I will keep it informed and I make an offer to the Party Leaders and Brexit spokespeople to ensure they are briefed whenever new developments make a move to activating our plans more likely.

Finally, Presiding Officer, it is vital that the people of Scotland get a clear, consistent message about the work that is being done. We are using all the normal communications channels to do so and will step that activity up in terms of public information when and if we required to put these plans into operation.

It is essential that there is a single clear, coordinating structure to take forward the plans and to measure them against the reality of what is taking place. Under the leadership of the Deputy First Minister that will be the SGORR mechanism which is now in operation. And it will report to the First Minister.

Presiding Officer, a “no deal” cliff edge exit is not yet inevitable. Indeed leaving the EU is not yet inevitable. But as a responsible Government we cannot wait any longer. The consequences and risks are too pressing and too severe.

Given the current situation it is incumbent on us to step up our existing planning for a "no deal" outcome in the ways I have just outlined.

The evidence is clear that a no deal would be a distaster and again I call on the UK Government to rule it out.

The challenges are not of our making. But being able to measure up to them is something that we can, and must, do.